Theranos CEO Elizabeth Holmes’ impending prison sentence was delayed after she was granted an automatic stay appealing a ruling that she would be jailed while appealing her conviction for fraud.
Earlier this month a U.S. District Court judge ruled that Holmes had to report to prison on April 27 and that she could not remain free while appealing multiple fraud convictions.
Ramesh “Sunny” Balwani, the blood-testing company’s former chief operating officer and Holmes’ ex-boyfriend, reported to prison last week after losing a similar appeal. Holmes was set to report to a minimum-security prison near Houston.
Both Balwani and Holmes were convicted for fraud after bilking investors out of millions of dollars with false claims and fake data regarding Theranos’ blood-testing technology, dubbed the Edison. Balwani was sentenced to 13 years and Holmes was sentenced to more than 11 years.
Holmes’ appeal sought to reduce her sentence on the grounds that her conviction was “unjust.”
Her lawyers have also argued that Holmes did not misrepresent Theranos’ capabilities.
Highly credentialed Theranos scientists told Holmes in real time the technology worked. Outsiders who reviewed the technology said it worked. Theranos’ groundbreaking developments received many patents,” according to the defense.
The automatic delay from the Ninth Circuit Court of Appeals came after Holmes’ lawyers argued that the denial she received earlier this month from District Court Judge Edward Davila contained “numerous, inexplicable errors,” including references to charges of which she was acquitted and that the appeal is “likely to result in reversal.”
Holmes, 39, was convicted of four counts of fraud and conspiracy in January 2022.
However, Holmes might not remain free for long. Balwani, 57, appealed to the same Ninth Circuit court after Judge Davila rejected his original appeal and was ultinately rejected a second time. After staying out of jail for about a month, Balwani reported to a low-security federal prison in San Pedro, Calif. last week.
Holmes founded Theranos after dropping out of Stanford in 2005. The startup was at one point valued at $9 billion before the scam fell apart following a series of bombshell articles in the Wall Street Journal in 2015.
The government has until May 3 to respond to Holmes’ appeal.